This thread is marked resolved, but I haven't even answered your question.
The hard coded content is what is there, and won't change when I save.
When you do an update, obviously the hard coded content is replaced that I had to put in, and the database is changed to the hard coded content contained in the new update.
Whatever is in the file is what is put into the database, nothing in those boxes is over ridden when the save feature is used.
Everything in the settings that I change in the boxes except for "Admin Email" and "User Email" are saved and they survive updates.
When I attempt to save the Admin and User email fields, (even after your latest 1.4.6 update), when the settings page refreshes, the content I changed looks like it saved. When I go to a different page and come back, the content in the boxes for "Subject" and "Body" for both Admin Email and User Email is reverted back to the original.
All the other settings that have been saved, stay as they were saved. It's only the Admin Email and User Email boxes that don't save and do not survive updates.
So, in answer to your question, the original always overrides whatever I attempt to save.